The Pricing Model Price Condition When you are starting to work on the scope of the deal with your customer, you can use the process of explaining your pricing model as a price conditioning exercise. For example: “Our pricing model works via the number of calls you make on our servers. Based on your numbers, if you continue to grow as you have over the last 12 months, the price could be as much as $500,000 more than it would be on last year’s volumes.” The Pricing Model Price Condition can also be used when talking about deployment size or different modules too. Other methods of price
The Pricing Model Price Condition When you are starting to work on the scope of the deal with your customer, you can use the process of explaining your pricing model as a price conditioning exercise. For example: “Our pricing model works via the number of calls you make on our servers. Based on your numbers, if you continue to grow as you have over the last 12 months, the price could be as much as $500,000 more than it would be on last year’s volumes.” The Pricing Model Price Condition can also be used when talking about deployment size or different modules too. Other methods of price conditioning can be as subtle as filling out the ‘cost’ section within the Go-Live Plan. When done consistently and thoroughly, by the time your customer gets your proposal, they will be expecting a higher cost. Therefore, your price will seem low, and this is all before they’ve even started to negotiate. I am often asked what happens if the customer reacts negatively to the price conditioning exercise. Usually, people will ask something like: “What if the customer says ‘forget it as we cannot afford that amount’?” Believe it or not, this is a wonderful thing to happen. It means your price condition has landed and taken effect. In an instance like this, I would advise the Seller to simply say something like: “Oh no, I don’t know how much this will cost for you. We are yet to crunch the numbers. I was only giving that number as an example.” I have heard some people refer to this process as anc...
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